Today's expected range for the Canadian Dollar against the major currencies:
US Dollar 1.3500-1.3750
Euro 1.6040-1.6290
Sterling 1.8420-1.8670
WTI Oil (opening level) $62.49
The CAD/USD is opening at 1.3626 ( 0.7339 )
USD/CAD pair edges higher against the CAD amid expectations that the Federal Reserve (Fed) will not cut interest rates in the near term. The US Consumer Price Index (CPI) inflation report will be in the spotlight later on Friday.
The US Nonfarm Payrolls (NFP) rose by 130,000 in January, above the market consensus of 70,000, while the Unemployment Rate edged lower to 4.3% during the same period. The recent stronger-than-expected US jobs data reduces the chances the US central bank will see a need to cut interest rates again by midyear, which underpins the USD against the CAD.
Meanwhile, crude oil prices fall amid expectations of a slowdown in global oil demand for 2026. This, in turn, weighs on the commodity-linked CAD.
On the other hand, dovish remarks from Fed officials could drag the USD lower in the near term. Fed Board of Governors member Stephan Miran said on Friday that monetary policy has passively tightened. Miran added that the central bank can afford to have lower interest rates.
Headlines
· US existing home sales fell 8.4% in January 2026 to 3.91 million, below the expected 4.18 million and the lowest since September 2024. Unsold inventory dropped to 1.22 million units. Despite improved affordability from wage gains and lower mortgage rates, supply is low. Dr. Lawrence Yun noted weather impacts cloud the decline's causes.
· Japan and the US are far apart on what projects the USD 550 billion investment vehicle agreed in the US-Japan trade deal should be funded first, according to Japanese Trade Minister Ryosei Akazawa. He said that there is no decision yet even on when the projects might be determined or announced as negotiations continue ahead of a visit to the US by Japan PM Sanae Takaichi in March.
· The UK economy grew 0.1% in Q4 2025, below the 0.2% forecast. Production increased 1.2% and manufacturing 0.9%, while services stagnated and construction fell 2.1%. Annually, GDP rose 1.0%, below the 1.2% expected, with 2025 growth at 1.3%, up from 1.1% in 2024.
· Germany's current account surplus was €16.1 billion in December 2025, nearly unchanged from €16.2 billion a year prior. The goods surplus fell to €8.6 billion due to higher import growth than exports, and primary income surplus dropped. The services deficit widened, while the secondary income deficit decreased. The annual surplus for 2025 fell sharply to €197.4 billion from €251.5 billion in 2024.
· Trump is said to be planning to scale back some of his steel and aluminium tariffs, according to new reports
Key Points
· Equities: Tech fears hit U.S. stocks, Europe slipped on profit-taking, Asia was mixed as Hong Kong fell and China steadied.
· Volatility: CPI catalyst, short-term IV elevated, skew high
· Digital Assets: Range-bound BTC/ETH, IBIT/ETHA lower, crypto equities weak
· Fixed Income: US Treasuries served as a safe haven, surging and sending yields lower as equities sold off.
· Currencies: JPY strength eases, USD surges on safe haven demand.
· Commodities: Broad weakness as AI-driven risk-off tone grips markets; grains a notable exception